How to Start Your Own Business Tutorial for Budding Entrepreneurs

Expert Advice, Strategies, Tips, and Tools to Assist You in the Development and Launching of Your Own New Business — a Free Tutorial

This tutorial is all about empowering the entrepreneur inside you and helping you develop a successful business plan that enables you to start your business.

Business planning is a lot like a balanced diet. Everyone can agree on the importance and value of developing and maintaining a business plan, but not everyone feels they have the time or expertise to do it. This tutorial will help the novice learn the basics of creating a business plan while also providing tips to those professionals who have written a business plan but want to revise it or take it to the next level.

The tutorial includes expert strategies, advice, tips, tools, and resources that will help make planning/writing/revising your business plan a positive and rewarding experience.

Where to begin? Business planning is kind of a lock-step process, and we suggest using the tutorial in the order we present it. Follow this link to a map of the tutorial, or simply use the right arrow below to begin the tutorial.

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Business Plan Tutorial: Title Page

Title Page of Your Business Plan

The title page of your business plan should be short and to the point.

Typically the title page includes the name of the business (“Business Plan for Joe’s Tree Farm”), the time period of the plan (“2012-15”), the names of the founding directors, the names of the people to whom the plan is being presented, and the date of the presentation.

Remember that the title page is the first thing readers are going to see, so make sure it makes a positive impression — no typos, smudges, or unusual colors or fonts.

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Business Plan Tutorial: A Typical Business Plan Outline

A Typical Business Plan Outline

Here’s an outline of the major section of a typical business plan. The following pages of the tutorial will go into the specifics of each section.

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Business Plan Tutorial: Appendices to Your Business Plan

Appendices to Your Business Plan

You’re almost done!

The main sections of your business plan should be relatively short and provide just the information necessary for banks or investors to make informed decisions.

It is in the appendices, though, where you put all your supporting materials — both for your benefits, as well as for those folks who want to see more of the hard data. Remember to only include materials that are relevant to your business plan.

What are the types of things you might put in your business plan appendices?

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Business Plan Tutorial: Assessing Your Competitive Advantage

Assessing Your Competitive Advantage

Once you’ve completed a detailed SWOT Analysis for your company, you should then be able to more clearly articulate your competitive advantage.

What is a competitive advantage — and why is it important?

It defines the one thing that you do (that you provide) that is different or better than any of your competitors.

Offering greater value to your customers than what your competition can offer.

Competitive advantage can be price, but it is better to be benefits provided.

You may have more than one competitive advantage, but its best to select just one or two (to keep it simple for your customers to understand)

Once you identify your competitive advantage, you can claim your position in the market. Positioning is the image you create about your business for your prospective customers.

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Business Plan Tutorial: Branding & Brand Development

Branding & Brand Development

Developing a brand — a brand name — for your product or service is important because consumers relate to brands, and, ideally, the brand name relates to the promise of your product or service.

Just as with the name of your business, you’ll need to be thorough in investigating possible brand names — certainly if the brand name(s) is different than your company name.

The name you choose for branding can be anything — a word, a group of words, or a group of letters — but ideally should be easy to remember, easy to say, and give the user some idea of the benefit of the product or service.

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Business Plan Tutorial: Business Mission Statements

Business Mission Statements

Most businesses have some form of mission statement — whether they know it or not. For example, other names for a mission include: founder’s philosophy, statement of purpose, business philosophy. An organization’s mission describes its fundamental purpose and overall philosophy. Note: A mission statement (what we are) is different than a vision statement (what we want to become).

Other ways to think about a mission statement as you begin to write one include:

Answers the question, “What business are we in?”

Provides thrust and direction to the organization.

Must be market-oriented (focusing on the problem the business is solving), not product-oriented.

Should be realistic and attainable… ambitious, but not impossible.

Should motivate employees and other stakeholders.

Why is a mission statement important?

Provides thrust and direction to the organization.

Cornerstone of all strategic planning.

As you begin to work on your company’s mission statement, remember that it is best to keep it to an actual statement — concise and to the point, and something that can be easily remembered.

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Business Plan Tutorial: Business Operations

Business Operations

The Business Plan takes a dramatic turn with this and the last section, going from a strategic and planning tone to one of specifics of how all aspects of the business will be managed.

Operations deals with how inputs are used/manipulated to become outputs.

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Business Plan Tutorial: Choosing a Company Name

Choosing a Company Name for the New Business

Choosing a company name — unless you are using your own name as the business name — takes some creativity, research, and paperwork.

In choosing a company name, you want something that is catchy, memorable, and relates to the purpose of the business. For example, Speedy Clean Dry Cleaners sends a message to your prospective customers that you clean garments quickly.

You’ll also want to conduct some research — both on what you need to do to register your company name (depending on how you choose to operate) and also to make sure you are not using an existing name that is already registered or trademarked. You can do the work online, but you may also want to hire a firm to do all the necessary work involved.

Finally, the paperwork. At the very least, if you are a sole proprietor, you’ll need to file the name of your company with your state — as doing business as. These names are called fictitious names — and there is usually a fairly simple form and process for registering it. For partnerships, corporations, and limited liability companies, there is much more involved with choosing and using a company name (as well as other paperwork).

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Business Plan Tutorial: Company Specifics

Company Specifics

Here are the key elements that should be included in the Company Specifics section of your business plan:

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Business Plan Tutorial: Company/Industry Strategic Analysis

Strategic Analysis of Company/Industry

An important element of your business plan has to be a detailed examination of the industry in which you will operate — including an industry overview, the level of competitiveness, the type and number of competitors, changes/future of the industry, and how your product or service is different than those already on the market.

The two primary components of this strategic analysis section of your business plan are a SWOT Analysis and a description of your Competitive Advantage.

Go to the next pages of the tutorial to learn about these key components.

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Business Plan Tutorial: Creating a Sales Forecast

Creating a Sales Forecast

The sales forecast of your business — typically a 1-year (monthly) and 3-year (quarterly) forecast — is an essential tool to not only show your expectations for sales, but also to use for your other financial statement, the profit-loss projections.

You will never have perfect information, so remember that at best, your forecast is an estimated guess as to what to expect. Of course, you want to base the forecast on as much information as possible.

Note: If you sell more than one type of product or service, prepare a separate sales forecast for each service or product group.

How do you develop a realistic sales forecast for your business?

Examine industry sales surveys

Gather sales intelligence on competing products/services

Talk with neighboring businesses

Contact local chamber of commerce or merchant association

Determine your local trading area — how far will your customers come from — and then estimate the percent of your target market in your trading area

List and estimate sales of competing businesses in your trading area

Make an educated guess at the number of customers you hope to attract to your business, as well as how much each is likely to spend per visit. Keep your estimates very conservative

Prepare sales estimates month by month. Remember that your early start-up month sales will be typically be slower until word-of-mouth builds — and don’t forget to include any seasonal fluctuations

Consider having an industry expert review your assumptions and projections, and make changes as necessary

Once you start operating the business, track projected and actual sales, and once you have enough data, make adjustments to your future forecasts to better project sales and profits.

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Business Plan Tutorial: Creating Your Customer Value Statement

Creating Your Customer Value Statement

A Customer Value Statement (also sometimes referred to as a Customer Value Proposition) describes the actual benefit(s) to the customer from your products and services. You must create one for each of your brands.

How do you create a customer value statement?

Develop full understanding of the benefits that target customers value

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Business Plan Tutorial: Developing Your Marketing Plan

Developing Your Marketing Plan

Marketing is the life-blood of any organization, for without customers, there is no company… thus, this section of the business plan is critical. You must know all about your customers and potential customers, how to brand your product/service to make it different than similar products, and the fundamentals of developing a basic marketing mix using the key tools of marketing.

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Business Plan Tutorial: Executive Summary

Business Plan Executive Summary

Your executive summary is a summary of your entire business plan, and a critical component of the entire plan. Ideally, you should write this section last, after you have completed writing the entire plan.

Unlike other types of executive summaries (which are often a paragraph or two), your business plan executive summary should be a two to three page summary of the contents of the plan.

The executive summary is more for people who are indirectly responsible for making decisions about your business plan, but for whom their support is necessary. These folks may only read your executive summary when basing a decision on whether to support your business.

The executive summary should not rehash the entire plan nor go into too many details. Instead, it should spell out the key opportunity you seek to capitalize on — and the major highlights on how you plan to do so. A brief financial overview — with topline numbers only — is also important.

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Business Plan Tutorial: Financial Statements

Financial Statements

The financial section of the business plan estimates the sales, monetary resources, and flows that you’ll need to move forward with the business plan. It also indicates when and by how much the business intends to be profitable.

Finally, the financial statements tell a lot about the entrepreneur in terms of business commitment and financial wherewithal to make the business a profitable success.

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Business Plan Tutorial: Introductory Elements

Business Plan Introductory Elements

Here are the key parts that should be included in the Introductory Elements section of your business plan:

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Business Plan Tutorial: Licenses and Permits

Licenses and Permits

Chances are good that your business is going to be need one or more permits and licenses to operate legally. In some areas, all businesses need a basic business or occupational license, while some need (like a restaurant) may need several.

And remember that you have several governmental bodies that may require a permit or license, including city, county, state, and national.

If the business operates out of a building — whether commercial or residential — you’ll also want to make certain it is zoned for the use you seek. (And for commercial buildings, make certain it is up to code.)

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Business Plan Tutorial: Map of the Business Plan Tutorial

Map of the Business Plan Tutorial

Here’s the site map to the Quintessential Careers Business Plan Tutorial:

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Business Plan Tutorial: Preparing a Profit & Loss Statement

Preparing a Projected Profit & Loss Statement

This financial tool helps spell out your revenues and expenses for a particular period of time, and the resulting profit or loss from operations. Like your sales forecast, you should develop a monthly P&L for the projected first year of operations, as well as quarterly projections for the first three years.

In developing your P&L projections, remember that your revenues are your business inflows, while your expenses are your outflows.

For many businesses, your revenues will be your projected sales. However, there are often other streams of revenue, such as memberships (if you sell them), advertising or slotting fees (if you charge them), and any other sources of income for the business.

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Business Plan Tutorial: Preparing a SWOT Analysis

Preparing a SWOT Analysis

A SWOT Analysis examines the internal and external environments facing an organization, including the strengths and weaknesses of the organization and the opportunities and threats from elements outside the organization.

What’s the process for creating a SWOT analysis?

Strengths and Weaknesses — of company, owner(s), products, services, brands, etc… things that the company controls. For small firm, founding entrepreneur’s traits are critical.

Opportunities and Threats — occur in the external environment and are not under control of company, such as economic, social, demographic, cultural, competitive, and political trends. It’s critical for you to know key competitors and competing products/services.

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Business Plan Tutorial: Sample Business Mission Statements

Sample Business Mission Statements

The following are the actual — or at one time — mission statements of some of the top corporations in the U.S. Some are better than others, but from this collection you can get an idea of how to write your mission statement.

Coca-Cola: As the world’s largest beverage company, we refresh the world.

Tyson: We are dedicated to producing and marketing quality food products that fit today’s changing lifestyles.

Dell: Dell’s mission is to be the most successful computer company in the world at delivering the best customer experience in markets we serve.

Nike: To bring inspiration and innovation to every athlete* in the world. (*If you have a body, you are an athlete.)

Merck: Providing society with superior products and services — innovations and solutions that satisfy needs and improve the quality of life.

Harley-Davidson: We fulfill dreams through the experience of motorcycling, by providing to motorcyclists and to the general public an expanding line of motorcycles and branded products and services in selected market segments.

3M: To solve unsolved problems innovatively.

Facebook: Facebook’s mission is to give people the power to share and make the world more open and connected.

Wal-Mart does not have a formal mission statement, but states: Saving people money to help them live better was the goal that Sam Walton envisioned when he opened the doors to the first Walmart more than 40 years ago. Today, this mission is more important than ever to our customers and members around the world.

To see more sample business mission statements, check out this really awesome site… MissionStatements.com.

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Business Plan Tutorial: Table of Contents

Business Plan Table of Contents

The table of contents lists all the major sections and components of your business plan — and the page numbers for where readers can find them in the plan.

Always include a table of contents — and always make sure the page numbers listed on the contents page match the actual page numbers in the plan.

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Business Plan Tutorial: The Marketing Mix for Your Business

The Marketing Mix for Your Business

The marketing mix is one of the fundamental tools of marketing. The marketing mix — sometimes referred to as the 4 P’s — includes the product, price, promotion, and place (distribution).

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Business Plan Tutorial: Understanding Your Target Market

Understanding Your Target Market

What is a target market?

Target Market: people who you want to use your products or services; people most likely to buy your brand over competing products/services.

The critical element here is identifying the people in your target market. Typically we use demographics — things like age, income, gender, education, etc. — to describe these folks, but we could also use things like lifestyles or the benefits they seek/get from using our product.

One other thing to consider. Are your customers — your target market — going to be local or global?

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